Tuesday, May 07, 2013

If you get a PhD, get an economics PhD

People often ask me: "Noah, what career path can I take where I'm virtually guaranteed to get a well-paying job in my field of interest, which doesn't force me to work 80 hours a week, and which gives me both autonomy and intellectual excitement?" Well, actually, I lied, no one asks me that. But they should ask me that, because I do know of such a career path, and it's called the economics PhD.

To which I respond: There are PhDs, and there are PhDs, and then there are econ PhDs.

Basically, I think of PhDs as mostly falling into one of three categories:

1. Lifestyle PhDs. These include math, literature and the humanities, theoretical physics, history, many social sciences, and the arts. These are PhDs you do because you really, really, really love just sitting and thinking about stuff. You work on you own interests, at your own pace. If you want to be a poor bohemian scholar who lives a pure "life of the mind," these PhDs are for you. I totally respect people who intentionally choose this lifestyle; I'd be pretty happy doing it myself, I think. Don't expect to get a job in your field when you graduate, though.

2. Lab science PhDs. These include biology, chemistry, neuroscience, electrical engineering, etc. These are PhDs you do because you're either a suicidal fool or an incomprehensible sociopath. They mainly involve utterly brutal hours slaving away in a laboratory on someone else's project for your entire late 20s, followed by years of postdoc hell for your early 30s, with a low percentage chance of a tenure-track faculty position. To find out what these PhD programs are like, read this blog post. If you are considering getting a lab science PhD, please immediately hit yourself in the face with a brick. Now you know what it's like.

(Note: People have been pointing out that EE isn't as bad as the other lab sciences, with somewhat more autonomy and better job prospects. That's consistent with my observations. But econ still beats it by a mile...)

3. PhDs that work. I'm not exactly sure which PhDs fall into this category, but my guess is that it includes marketing, applied math and statistics, finance, computer science, accounting, and management. It definitely, however, includes economics. Economics is the best PhD you can possibly get.

Why get a PhD in economics? Here's why:

Reason 1: YOU GET A JOB.

Can I say it any more clearly? An econ PhD at even a middle-ranked school leads, with near-absolute certainty, to a well-paying job in an economics-related field. I believe the University of Michigan, for example, has gone many, many years without having a PhD student graduate without a job in hand.

You will not always get a tenure-track job, though there are a lot more of those available right now than in other fields (thanks, I am guessing, to the nationwide explosion in business schools, which hire a lot of econ PhDs, including yours truly). But if you don't get a tenure-track job, you will get a well-paid job as a consultant, or a well-paid job in finance, or a decently-well-paid job in one of the many, many government agencies that hire armies of economists. All of these are what are commonly referred to as "good jobs," with good pay, decent job security, non-brutal working conditions, and close relation to the economics field.

Now, this may be less true at lower-ranked schools; I don't have the data. I imagine it's not as certain, but still far, far better than for lab science PhDs at similarly ranked schools.

Why do so very few newly minted econ PhDs face the prospect of unemployment? Part of it is due to the econ field's extremely well-managed (and centrally planned!) job market. Part of it is due to the large demand from the lucrative consulting and finance industries. And part is due to the aforementioned proliferation of b-schools. There may be other reasons I don't know. But in an America where nearly every career path is looking more and more like a gamble, the econ PhD remains a rock of stability - the closest thing you'll find to a direct escalator to the upper middle class.

Reason 2: You get autonomy.

Unlike the hellish lab science PhD programs, an econ grad student is not tied to an advisor. Since profs don't usually fund econ students out of grants (few even have big grants), econ grad students mostly pay their way by teaching. This means you usually have to teach, but that is not nearly as much work as working in a lab. Even when a professor does support you with a grant, (s)he generally employs you as a research assistant, and gives you ample time to work on your own research.

Compare this to a lab science PhD, in which you basically do the project your advisor tells you to do, and you succeed or fail in part based on whether your advisor chooses a project that works out. Your destiny is out of your hands, your creativity is squelched, and your life is utterly at the mercy of a single taskmaster. In economics, on the other hand, you can start doing your own original, independent research the minute you show up (or even before!). Profs generally encourage you to start your own projects. Unlike in lab science PhD programs (but like in "lifestyle" PhD programs), your time is mostly your own to manage.

This means that as an econ grad student, you'll have a life. Or a chance at having a life, anyway.

Reason 3: You get intellectual fulfillment.

Econ is not as intellectually deep as some fields, like physics, math, or literature. But it's deep enough to keep you intellectually engaged. Econ allows you to think about human interactions, and social phenomena, in a number of different intellectually rigorous ways (e.g. game theory, incentives, decision theory, quantification of norms and values, bounded rationality, etc.). That's cool stuff.

And economists, even if their research is highly specialized, are encouraged to think about all different kinds of topics in the field, and encouraged to think freely and originally. That's something few people appreciate. In a lab science, in contrast, you are encouraged to burrow down in your area of hyper-specialization.

In econ, furthermore, you get exposed to a bunch of different disciplines; you get to learn some statistics, a little math, some sociology, a bit of psychology, and maybe even some history.

Also, as an economist, your status as an intellectual will not disappear when you get a job. Even if you go to work as a consultant or a financier, your thoughts will be welcomed and considered by economists in the blogosphere. And you can even publish econ papers as a non-academic.

In fact, it's also worth pointing out that econ is a field in which outsiders and mavericks are able to challenge the status quo. This is in spite of the econ profession's well-known deference to intellectual authority figures. The simple fact is that econ, you don't need money to advance new ideas, as you do in biology or chemistry. And you don't need math wizardry either, as you would if you wanted to introduce new ideas in physics.

Reason 4: The risk of failure is low.

In economics PhD programs, the main risk of failure is not passing your prelim exams. This happens to a substantial fraction of people who get admitted to econ programs (maybe 25% or fewer at Michigan). But if you flunk out, you get a complimentary Master's degree, which is probably worth the 2 years that you'll have spent in the program. And after you pass the prelims, there is little risk of not finishing a dissertation; unlike in most fields, you do not have to publish to graduate.

Caveats about the econ PhD

Of course, I don't want to make it seem like the econ PhD is an utterly dominant strategy for life fulfillment. There are some caveats that you should definitely take into account.

First, there is the fact that an econ PhD program is still a PhD program. That means, first of all, that you will be in poverty in your late 20s. That is not fun for most people (some "lifestyle PhD" students and bohemian artists excepted). Also, econ PhD programs force you to manage your own time, while giving you very little feedback about how well or badly you're actually doing. That can be stressful and depressing.

Second, be aware that the culture of economics is still fairly conservative, and not in the good way. Econ is one of the few places in our society where overtly racist and sexist ideas are not totally taboo (Steve Landsburg is an extreme example, but that gives you the general flavor). Discrimination against women, in particular, probably still exists, though I'd say (or I'd hope, anyway) that it's on the wane.

Finally, there is the fact that if enough people read and believe this blog post (ha!), it will cease to be true. There's a piece of economics for you: as soon as people become aware that a thing's value is greater than its price, they will start bidding up the price. But information diffuses slowly. Expect the econ PhD to lose its luster in five to ten years, but that still gives you a window of time.

Anyway, despite these caveats, the econ PhD still seems like quite a sweet deal to me. And compared to a hellish, soul-crushing, and economically dubious lab science PhD, econ seems like a slam dunk. There are very few such bargains left in the American labor market. Grab this one while it's still on the shelves.

[E]ven going to the abysmally ranked [econ]department that I go to I have no worries at all about getting a good job after I graduate. It may not be an academic job, but that's fine by me (or if it's an academic job it might be in a policy department rather than an econ department).

Another anecdote supporting the thesis that even econ PhDs at low-ranked schools don't worry much about employment...

I've heard that part of the reason econ phds do so well is that the programs are relatively more selective of who they accept (more so than math and physics for example). Is that true?I guess it would make sense that the econ programs understand supply and demand...

About that, do you think, with more Econ-PhDs in the pipeline looking for "new and innovative" research topics, more emphasis is definitely going to be laid on empirics? Especially considering, for students (being one myself), empiric research is a safe-haven compared to those dreaded theory topics.

I'm not sure that decent econ PhD programs are relatively harder to get into than decent PhD programs in comparative field. But the job prospects are probably superior.

As a case in point, I suspect that anybody who can get into a decent math/physics PhD program can easily get into a decent economics program while the reverse is not true. On the other hand, the guy with the economics PhD will have far better job prospects than somebody with a math/physics PhD.

I'm just finishing up in a decent ranked Ph.D. program. I expect that it's more difficult to get in if you're not a U.S. citizen, but I understand that our department received quite few domestic applications for admission. From what I understand, if you're willing to do the work to get in, such as good foundation courses, then the real trick is staying in, not getting in. I was talking with a fellow econ Ph.D. candidate this morning and we were both taken back by how few of our classmates actually lasted to the point of passing prelims.

My sense is that the quality of the applicant pool has been increasing, while most programs have not significantly increased the number of admits to the same degree (if that makes sense). Its already the case that the median successful applicant in most top 25 (or even top 50) places has the equivalent of an undergrad math major. If programs can continue increasing the difficulty of the first year core, and maintain the same level of selectivity, there's no reason why an Econ PhD can't maintain its value indefinitely.

But they can start charging more - implementing onerous teaching requirements and the like, giving out fewer first-year fellowships and other department support. And the difficulty of the first-year core is a real cost too.

Also, electrical engineers usually get funded by companies and don't take out loans for phd programs. At least at any school in the top 10 or so, and probably even in the top 30. Profs expect to help students find funding without much TAing.

Since profs don't usually fund econ students out of grants (few even have big grants), econ grad students mostly pay their way by teaching.

Doing a PhD -- economics or otherwise -- can actually translate to relatively gainful employment if you consider places like Scandinavia. Certainly, you don't face the same opportunity costs as elsewhere :)

A lot. A masters just gives you a pay bump at some government job and makes you overeducated for anything else you might want to do. There also arent really any good US programs that are just for masters degrees anyway.

1. You say that you're guaranteed a job in academia or a something related in the private or public sector. But you can get any of these jobs (except working in academia) without a PhD. An Honors or Master's (or possibly even just undergrad) degree will do.

2. While you're virtually guaranteed a job in academia (or so you argue), what's to say that you'll keep that job. To keep a job in academia you need to continually publish papers, probably at least 1 per year. How can you be sure that you'll think of enough original ideas to keep up this rate of publishing?

3. Another reason to avoid lab based PhDs which you didn't mention is the hell people have to go through to get grants and funding. I hear that something like only 10%-20% of funding applications are successful. Is it your experience that this isn't needed in economics (or even fields like math and physics), because all you really need to do economics is pen, paper and brain (and possibly a computer)?

"While you're virtually guaranteed a job in academia (or so you argue), what's to say that you'll keep that job. To keep a job in academia you need to continually publish papers, probably at least 1 per year. How can you be sure that you'll think of enough original ideas to keep up this rate of publishing?"

Until you get tenure, you mean.Once you get tenure, you have to do something egregious (like show up drunk for a class you're teaching) to get fired.

Not really, Kevin. Not that many economics PhD graduates have any publications at all when they graduate. You mostly rely on the strength of your job market paper, which is generally an unpublished section from your dissertation.

Kevin, I think that Anonymous above (who is a different 'Anonymous' than me) meant that the job-market paper - which is indeed often times an unpublished chapter of your PhD thesis is sufficient to obtain a tenure *track* job. It obviously is insufficient for you to obtain tenure itself. But at least you've obtained the job. You can then later worry about amassing a CV worthy enough to obtain tenure.

And besides, look at it this way. Many (I suspect most) starting tenure-track positions will guarantee employment, by virtue of an employment contract, for at least 2-3 years (provided you fulfill basic job requirements, such as actually teaching the classes you are assigned) . Granted, after that period, your work will be reviewed, and you could be terminated. But hey, at least you have 2-3 years of guaranteed pay...and, if, with a year remaining on your contract you haven't published anything, you can use the remaining guaranteed time as an extended job search. Let's face it - how many private sector jobs will guarantee employment for 2-3 years? I know people who were terminated literally only 2-3 *days* after they were employed. {For example, a firm, right after hiring you, decides to engage in a major strategy shift, hence relegating your position as expendable.}

Regarding the comment of "You say that you're guaranteed a job in academia or a something related in the private or public sector. But you can get any of these jobs (except working in academia) without a PhD. An Honors or Master's (or possibly even just undergrad) degree will do."

Uh, really? I can certainly think of plenty of people with honors undergrad degrees, and some even with master's degrees, who in this economy can't find gainful employment and are stuck working, say, in low-paid service jobs (waiting tables, stocking shelves, etc.). Heck, I can think of some people with Phd's stuck in those positions. {Granted, their PhD's are in humanities or related matters, but still.} In contrast, somebody with a PhD in economics is assured of at least not being stuck stocking shelves.

I am also much more doubtful about doing a PhD just because it's a great life choice. Reading your text sounds a lot like Groupthink. We really like to rationalize our own life choices and to explain to others why that was definitely the best choice to make.

Well, I'll say this. I wish I had completed a PhD in economics when I was in my early 20's, as, frankly, it would have probably been a far more productive use of my time than what I actually did during those years. Since I don't have an economics PhD (and never will), I can't be accused of rationalizing my own life choices.

Nor am I the only one. Let's face it - many (probably most) people in their early 20's are not really improving their lives. Nor are they entirely to blame, for many of them are simply not being given strong opportunities to improve, particularly in this economy. Most entry-level jobs available to new college graduates simply don't provide great career opportunities for advancement and development. An economics Phd at least gives you the chance for an excellent career.

Now, there's a true statement if I ever heard/saw one! And someone will pay you big bucks for whatever you say, 'cause they need an expert on board AND they personally know nothing about economics. Further,no other profession is so fraught with "theory" as opposed to "actuality".

Noah - "And after you pass the prelims, there is little risk of not finishing a dissertation"

What evidence do you have for this, Noah? My guess would be that the percentage of prelim passers who do not go on to finish their PhD is closer to 10 to 20 percent. Some drop out because they find better opportunities, others fail to find a topic or a supervisor, others find writing a thesis too much.

The outside opportunities available to econ PhDs also vary from field to field - not all fields are in demand in business schools. You're in a field that's particularly marketable right now.

That people get a middle class job after completing a PhD does not mean that the PhD was a good investment. I once talked a student out of getting a PhD by pointing out that, after the PhD, he was quite likely to end up with a good job as an analyst in government - i.e. exactly what he was doing already. Last I heard he was thriving, and very grateful to me for my advice.

Just found some Canadian data - in Canada's 13 most research-oriented universities, the share of PhD students who graduate within nine years of starting is 54% for humanities, 64% for social sciences, 72% or physical sciences and 76% for life sciences.

It doesn't say *when* they drop out, but lots of people who start a PhD don't finish.

If you consider 25-30% of the students don't pass comps then you are pretty close to the 64% number that you just reported. I'm guessing the number of students that drop out during the first year and from not pass comps is somewhere between 30-35%.

The lab-based PhDs aren't nearly as bad as you make out (I have one). Its true that job prospects in Academia are pretty grim right now (even tenure-track positions rarely result in tenure). However, only a minority of lab PhDs prefer to work as professors. There are lots of jobs in industry, in government, or working for research institutes.

The job market today is still challenging, but that is surely temporary. It's a cycle that has been repeated many times since my grad school days.

Well, my PhD experience 40 years ago was anything but hellish. Yes, I worked a lot of hours, but it was great fun. I not only picked my own research subject, I strongly suspect that my advisor didn't really understand exactly what I was working on.

My son is currently in a Molecular Biology PhD program at Berkeley. His experience is roughly similar to mine. He will undoubtedly do a PostDoc, since that's a box that needs to be checked in his field, but that is more about broadening skill sets than anything else.

Nothing against Econ PhDs. That also sounds like a very rewarding experience.

My first year as an undergrad, I and everyone else was forced into a freshman comp course. It was a big state university, and the PHD candidate teaching it looked like she was about to have a heart attack.

She was teaching 3 sections of freshman comp (our group was around 30 students) and finishing her dissertation that year. I just googled now to see if that was a weird, abusive situation and I see the top results come back with English departments promising prospective English grad students they'll get to teach 2 sections, maybe even from their first year if they're lucky!

I got a check-plus on all of my papers and no comments. I never sought office hour help because she made it pretty clear we'd kill her if we did. It was like a scared-straight video, where they take high school kids to prison to get yelled at by prisoners, hoping they'll not repeat the same mistakes.

I, on the other hand, was assigned to TA the "writing in the major" requirement my first year in a big state school for econ. I had 1 section each semester and, even though I took two full-time course loads at the same time, still could read each paper and give them lots of comments and mull over grades and work with students and generally do the whole thing with some joy.

I love Austen and Shakespeare and Hemingway, but I'm so glad I studied econ. Even without considering the job aspect.

Noah, math isn't like that. It's a good PhD experience *until you get to the thesis*, and then nearly everyone agrees that it's hellish. It does get you work, but only if you can prove that you're practical.

Also, many of the "lifestyle PhD" situations are beyond hellish. Ask a philosophy PhD -- worst stories I've ever heard. The same applies to any field where the demand for teachers and researchers has dropped below a critical threshold. The only nice "lifestyle" PhDs are the ones where lots of undergrads want to or have to take your courses, such as English or history.

In the "humanities", history's a bit of a special case because it is actually sought after by industry. (Specifically, the military.) It's verging on scientific, most of them aren't.

Re: the Austrian-MMT debate--please keep in mind that Murphy represents one wing of Austrian econ, the Mises Institute (i.e., he's somewhat suspicious of that "fractional reserve banking" thing). He is a very sharp, funny, open-minded guy. But I'd much rather see George Selgin up there repping Austrians.

Other than defending an idiot, name-calling, and not adding the necessary disclaimers to a thought experiment, it's not clear what Landsburg is guilty of. It's certainly not clearly that he regards women as inferior to men, but the label "sexist" not appears to have very broad definition.

The most important questions in economics are recessions, financial crisis, unemployment, monetary/fiscal policy.If you want to contribute in those arenas, you should apply to Ph.D. programs that focus on modern macroeconomics like Minnesota. That is where the cutting edge dynamic stochastic models of the macroeconomy are developed.

They'll be saying that for the next forty years, until all of the currently-tenured macro guys there have dropped dead. And twenty years from now, if you ask a mid-career macro prof about Minnesota, they'll look at you funny, and say that they didn't get the joke.

"But decent econ PhD programs are so hard to get into! Have the rest of us effectively locked ourselves out of fulfilling upper middle class lives?"

Nope, I think Noah has a pretty narrow view of options.

Becoming a doctor still means a very stable & generally lucrative career (because MD's have one a great job of protecting their own; though many doctors are deeply dissatisfied now due to our screwed-up health-care system). Other health care fields promise to be in high demand going forward as well.

Along with econ, I would lump in other non-lab practical fields of study like CS, stats, and almost everything taught in b-schoool besides psych.

BTW, Noah, in one of your links, you pointed to www.econjobrumors.com, which is really a breathtaking site. I see more emotional maturity in 12 year-olds.

Is it the anonymity? The stress & competition?

Yet even when anonymous, the people in the circles I've run in (CS geeks and b-school students) show more forbearance, logic, and generosity of spirit than what I find on www.econjobrumors.com (I've been on the Businessweek b-school forum and too many CS geek forums to count).

Is it due to econ PhD programs attracting maladjusted juveniles or econ departments turning folks in to maladjusted juveniles?

Yet even when anonymous, the people in the circles I've run in (CS geeks and b-school students) show more forbearance, logic, and generosity of spirit than what I find on www.econjobrumors.com...Is it due to econ PhD programs attracting maladjusted juveniles or econ departments turning folks in to maladjusted juveniles?

Good question; I don't know the answer.

I guess it might be the conservative political culture of the field. Conservatives might just be a lot more personally nasty when they're anonymous and online...and we just don't normally see that, since most anonymous online forum denizens are liberals.

Then again, go to 4chan and they make the econjobrumors people look like kittens...

Certainly, the libertarian/conservative ideology would attract psychopaths, and while both econ and b-schools would be attractive to them, b-school students are trained to keep a veneer; so much so that the smoothness is almost second-nature, while I don't think any such training exists for econ PhD students.

Try: there is a huge selection bias to participation on that website. Economists who don't like nastiness know to stay the hell away from there, because it's more a source of stress than it is helpful, with any weighting of concerns appropriate to a mature adult. You learn that the anonymous online econ communities are full of awfulness by the time you pick a grad program (it's all just as nasty for the grad school acceptance websites). Sane people decide early on that it's better to pretend these places don't exist and to ignore them completely. (I am an econ grad student. Most of my good friends in my program don't post, and many of us don't even read the site. When it comes up in conversation between us, it is usually someone complaining about how awful it is. I know that others in my program do read and post regularly, but there are plenty of us who avoid it like the plague.)

As to why it's worse than CS or other programs, I think it's a result of the way the first year is structured: direct competition under which a pretty much set percentage of students is going to fail. That environment is going to bring out the most immature, petty, nasty side of almost everyone, and it does, because a huge aspect of that competition is psychological, and you can't help knowing that the programs are set up that way (so psychological nastiness becomes a dominant strategy and thus a dominant culture). Once you've been trained to view your classmates in that light, it takes conscious work to switch perspectives, and only a plurality of people make that effort. I'd be willing to bet that the students at the schools with the highest failure rates on comps are the nastiest online.

I'd still agree that if you're going to get a PhD, economics is the way to go. But the first year deserves its own circle of hell (increasingly so as the technical requirements keep rising); it's only after year 1 that the lifestyle is better than other disciplines.

"I guess it might be the conservative political culture of the field."

Hmm, I would like to see a survey with some data on this. My observation is that there are more liberal academic economists than conservative ones. And it is not just me:http://www.nytimes.com/2011/07/24/education/edl-24notebook-t.html?pagewanted=all&_r=0

As far as sexism and racism go, in every hiring search I have participated women and minorities are placed at the top of the list, everything else being equal. And I have participated in at least one search, I will not disclose for which institution, where we excluded all male candidates because they were men, and we felt we sorely needed another woman in the department. However, maybe it is precisely these practices that generate the juvenile behavior that I too disaprove of.

I was expecting just that going to grad school (I studied a lab science as a UG and didn't know a single econ major), but I found the other students to be plenty collaborative. We did weekly study groups, emailed each other our homeworks to compare and discuss answers, and generally commiserated and supported one another. A few people went to great lengths to help others, which was good for me at first because I went there knowing little math.

It varies by program. But there are plenty of cool econ grad students out there.

Arguably a Ph.D in many areas of Engineering or CS can be an even better deal than Econ. Areas like theoretical CS and information theory have the rigor and depth of math/physics. Reasonably stimulating Ph.D-level jobs in industry are aslo plentiful. Ph.D students are funded by research grants, and typically don't TA for more than 2-3 semesters.

Where Econ wins is the ease of getting a faculty position. The academic job market in Engineering has taken a nose-dive in the past 10 years (the "hot" areas change every couple years) and it's suddenly become common for people to do a post-doc for 2-4 years.

As enrollments start to decrease in b-schools I would not be surprised if you see a switch to more economics phds. Among the business disciplines, economists are cheap labor. Can b-schools continue to justify paying $175-200k for a finance position when you can hire an economists for $125 (or less)?

I also see undergraduate enrollments increasing in economics and other data fields. With law schools experiencing a rapid decline in enrollments all of those political science students need to go somewhere.

Dohsan: Finance PhDs probably get paid a little more than econ PhDs. They are much more likely to work in industry. The finance PhD lifestyle is almost as good as the econ PhD lifestyle, with the exception that it's more intellectually constrained, since the topic range is much narrower.

I was going to mention engineering also. I think in some ways it's "easier" than Econ because you typically get a research assistantship which just involves you working on your research and getting paid for it. However, unlike Econ, most industry jobs are accessible to people w/ a Master's degree, and pay almost the same as a PhD job, so the opportunity cost of the Phd is not really justified unless you want an academic job.

I agree that most jobs in industry can be acquired with a Master's (at least in EE). However, there are still some fields that do require a PhD. This is particularly true for research positions, of which there are many.As for opportunity cost, even the majority of jobs that a Master's student could get, the starting salary is 80-90ish. The starting salary for a PhD is 100+. Since you're paid to go to school anyway, it doesn't take too long to make it worth your while from a financial perspective alone. Additionally, even among companies that do higher both Master's and PhD's, there can often be a difference in flexibility. Big companies (I've heard Boeing among others) lets PhDs have much more say in the type of work that they do than Master's students. A friend of mine whose dad worked at Boeing in EE recommended getting a PhD for the additional flexibility alone.

I'm too lazy to read all comments, but in case it hasn't been addressed: Chicago is not nearly as cut-throat as you depict it. The dropout rate in the last 7 years, at least, is around 10-15%. Nowhere near the >>25% you mention. That includes people who voluntarily quit and those who had to leave due to failure to fulfill a requirement such as passing the prelims.

As a neuroscience graduate student near finishing who interacts with a lot of econ grad students let me say that barely does a day go by when I don't wish I went to econ grad school (I almost applied! Silly me.)

As a holder of a lifestyle PhD, I would also add the opportunity costs to the list of reasons not to get one. After you get your doctorate, and muddle a year or so as an adjunct looking for a real job, you will find yourself in your early 30's competing for entry level positions with recent college grads. Very few employers care about your PhD as it is, at best, irrelevant to their needs and at worst, marks you as a possible malcontent.

The skills you learn, however, are mostly useless (unless you become a Professor to propagate the information further). The best skills you can get out of this study are econometrics and programming skills. Macroeconomic theory is great if you love talking about trade or want to become a politician. Otherwise, it's mostly BS.

I'm not so sure about this. Data skills and statistics skills are very important in a lot of data-related fields, including the aforementioned consulting and finance industries (which are both huge), but also in lots of random white-collar jobs.

Re: "The skills you learn, however, are mostly useless...I am talking specifically about microeconomic and macroeconomic theory on a graduate level."

In fairness, we have to judge the usefulness of the economics curriculum on a *relative scale*. While you might say that micro/macro grad theory are useless, let's be perfectly honest, much of the engineering curriculum, quite frankly, is rather useless as well. {Trust me, I know; I have 3 engineering degrees, all from prestigious engineering schools.} Let's face it, few if any actual real-world engineers actually derive pages after pages of calculus-based equations as part of their normal jobs. But that task comprises the overwhelming aspect of the grading (exams and homework) of most engineering programs. If you can't perform those derivations, you will flunk out and therefore never be awarded an engineering degree at all, regardless of how skillful of a real-world engineer you might have been.

As a case in point, I know one guy who works as successful software developer yet who not only doesn't have a CS degree, but openly admits that he probably could never get one, because he doesn't think he could pass the required theory courses. {Thankfully for him, you don't need a CS degree to work as a developer.}

Thanks for pointing out how, by following this "law", you will help to eventually invalidate it.

I call it Grey's law: any economic law or regularity which is specific enough to be acted upon in a beneficial way, will create incentives to be acted upon until the benefit vanishes, possibly even turning negative.

This is what bubbles are about. Just imagine that 10% more students enter econ grad school each year, and each year they earn more, until ... they don't. But I'd guess it's more like 20 years for econ folk, since most non-econ people believe it's a "science" when the laws of greatest interest are subject to the above invalidation.

We've seen the JD devalued by technology change, and I expect MBA's to follow fairly soon after.

The best jobs are where you can get very far if you are entrepreneurial (right now, that's tech).

Plus, supply & demand. I expect the demand for being able to do stats, numerical analysis, & code well/imaginatively to remain high in to at least the near future, and supply is constrained somewhat by talent.

Anyone who's reasonably smart can get a JD; not as true when it comes to hard skills.

"We've seen the JD devalued by technology change, and I expect MBA's to follow fairly soon after."

Noah: "This rings true to me.

The reason econ has a better chance of tenure-track, I think, is the proliferation of b-schools, combined with the explosion in the finance industry. Those trends will end soon, though"

The MBA is going down, and hard, I believe. There's a glut in the market, and b-schools don't have the mystique of law schools - when the prospective MBA students look at the salary data, they'll stop immediately.

Sounds to me like professor of economics fishing forgrad students. Note your updated links are dated frombefore the most recent financial crisis, do in largepart to dumb economists (some with Nobel prizes). Funny when magazines publish the year's "best jobs"you never see economists high on the lists. Hard tobelieve a PhD in economics is better in any way thanone in computer science (which often heads such lists). I'll take working at Google versus teaching atStony Brook.

OK, sounds like a b-school professor fishing for students.That's the kind of difference an economist would think isimportant. I side with Nassim Taleb, in that we need fewerand not more business and finance students.

Regarding the comment: "Hard to believe a PhD in economics is better in any way than one in computer science (which often heads such lists). I'll take working at Google versus teaching at Stony Brook."

But how many CS PhD grads will actually receive job offers at Google, or similar such 'cool' firms (which I assume would include Facebook, Twitter, Amazon, Apple, and the like}? I know CS PhD graduates from strong schools, and they aren't receiving offers from any of those employers. {To be clear, they're getting offers, but just not at any of the glamorous tech employers.}

I don't know about anybody else, but trankly, I'd rather take that faculty job at Stony Brook than be a software developer at some average firm.

It is funny that you argue lab science PhD's are bad because of how difficult it is to become a professor, but you ignore this aspect of econ PhD's. According to the most recent research I can recall, the unemployment rate of chemistry PhD's is around 3%. Half of them go into postdoc positions (which I would personally consider unemployment), but the 40% who decide to go into the industry make bank and seemingly have no trouble finding jobs.

Maybe the process is a bit harder, but it strikes me as a little slimy to judge real science by one metric and then heap praise upon econ under an entirely different metric!

It is funny that you argue lab science PhD's are bad because of how difficult it is to become a professor, but you ignore this aspect of econ PhD's.

No I don't. I just don't have specific data on how many econ PhDs get faculty jobs. I think it's a lot higher than for lab science, though, given the explosion in b-schools (which often hire econ profs), and the growth of econ departments.

but the 40% who decide to go into the industry make bank and seemingly have no trouble finding jobs

Sure, after they go through the hell of a lab science PhD, being hit in the face with a brick by their slave-driving Nazi advisors.

If you compare the NSF survey data to the various ACS type society numbers, you can ball-park that less than half of those lab science phds who go into "industry" actually go into a LAB SCIENCE industry (many go into finance, or science writing, or something totally out of left field). You have to be careful with those numbers for "industry" because its such a broad catch-all.

So only 20% find jobs in the field- there is so much trouble finding work that a solid 20% leave the field immediately upon graduating. Its worse in bio, and worse still in physics. Getting a science phd (of any kind) is a fairly bad idea.

Yup. Physics is something you should do if you love physics (which I did, by the way; studying physics is just pure intellectual pleasure). Bio is something you should do if you're a masochistic nutcase. Same goes for chem.

"According to the most recent research I can recall, the unemployment rate of chemistry PhD's is around 3%."

These statistics are garbage - if you can't get a job in your Ph.D. field, you'll get *something*, or live in the street. If you ended up as a barista, then you count as an employed barista, not an unemployed Ph.D.

So you say you're not being forced to work 80 hours a week... how many hours are you working? I am in my 2nd year of the Econ PhD and I am hoping to find a job that will allow for good "work-life balance" since I am a mom. My understanding is that tenure-track positions involve lots of hours (at least until the tenure is achieved) but do you have any insight into what kind of hours people are expected to work at the typical industry and/or govt. jobs?

Noah, what about Econ PhD's from non top-25 schools? Still a good bargain or no? Non top-50? At what point does the advantage of having an Econ PhD get trumped by getting crowded out by graduates of better schools?

I completed my PhD in Econ (well Applied Econ) last year at an unranked school, and had little trouble finding a good job. The academic job market wasn't very receptive, but I received a fair amount of interest from different businesses, and ended up in risk management at a bank.

Most of my peers had similar success finding work. It seemed to me that getting a tenure-track job from an unranked school is difficult. But, getting a good, well paying non-academic job was pretty easy.

The word "bubble" gets thrown around a lot, but compared to other areas (CEO compensation or traders' compensation or professional athlete salaries, for instance), the compensation for econ PhDs isn't terribly high nor have then risen very rapidly very quickly.They are pulled up by external market forces, however: 1. private industry (namely finance and consulting), and you can argue that the FIRE industries & consulting have built up a big bubble that is slowly deflating.2. the growth in b-schools, which may be a bubble (and also pulled up by FIRE and consulting), but as gigantic parts of the third world start pulling themselves up, they may keep feeding the b-school bubble for decades to come.

I think the only thing that has kept econ phds from hitting the career-hell of most other phds is the rapid growth in b-schools, if the student loan market stops growing rapidly, so will b-schools, and the market for econ phds will quickly begin to resemble that of all the other phds.

I think the only thing that has kept econ phds from hitting the career-hell of most other phds is the rapid growth in b-schools

That's part of it. But the econ and business majors have gotten a lot more popular among undergrads too, IIRC. http://visual.ly/trends-higher-education-0?view=true

But also, you have to remember that industry and govt. are out there too. Government has been hiring a LOT of economists since the crisis, including for existing offices, and for new things like the CFPB.

And industry provides huge demand for economists. Consulting and finance are absolutely enormous. In the future, I predict that economists will see a lot of demand from the data science field as well.

So yes, the better tenure-track job situation is partly because of the temporary expansion in b-schools. But the general high demand for economists is not going away soon, I think. Maybe 10 years from now.

Regarding the comment: "Government has been hiring a LOT of economists since the crisis"

Surely I'm not the only person who finds it deeply ironic that a crisis that - other than a few outliers such as Roubini and Shiller - was embarrassingly missed by the bulk of the economics profession would actually result in *greater* overall demand for the profession? How many other professions actually benefit so prodigiously from their own failures?

For those who agree, go ahead, name me some economists who actually lost their jobs because they missed the crisis. I'll wait.

That dynamic can cut both ways, though. I fell in love with math at an early age and wanted to be a math major. My parents were dead set against it, because pure math is so ... impractical.

Then the Internet happened, and pure math of the kind I was studying suddenly found an important application in the form of cryptography and network security. I currently do research in this field, in a math department. I have both tenure and full-time industry experience. I'd like to claim credit for having the foresight when I was 18 years old, but the truth is I just lucked out. While some truisms may always hold (the job market for history has never been strong in decades), the future is impossible to predict with complete accuracy. There is something to be said for following your passions. At least you are guaranteed some satisfaction with life for a little while.

I think this is mostly correct, and especially clever with regard to the 3-part taxonomy. It only leaves out that PhDs in Finance and Accounting have (in my experience) slightly better lifestyles (well-capitalized business schools and consulting income) as well as very attractive switching options when the economy is in a boom period. Also, whereas there are quite a few economics PhDs in "finance" positions in business schools, there are almost no finance phds in economics positions at (lower wage) institutions...i.e. argument via the revelation principle. Your comment about the intellectual "constraints" of finance is curious especially given your vast previous writings on how siloed the macroeconomics field is. Do you have any evidence on the intellectual constraint argument?

I think it's more fair to say that finance departments want a *subset* of econ PhD's. Let's face it, if your specialty is in, say, labor economics, you're probably not going to receive a job offer from a finance department, even if your PhD is from a top program. You also probably won't receive an offer from the finance industry, or at least, not a finance offer commensurate with having a PhD.

On the other hand, finance departments want *all* of the finance PhD's, at least from the top programs. That is to say, if you graduate with a PhD in finance from a top program, you're effectively guaranteed a lucrative job in finance academia or industry. Note, the academic job might not be at a top finance department - you might end up at some lower-ranked program - but you're effectively guaranteed a job somewhere.

not a hater, but, econ reminds me of meteorology. there's science involved, but alot of bad forecasts. your last two links seem to bely one econ theory. however, noah, I like your style. You make econ interesting. ( this coming from a carpenter)

Noah, thanks for promoting discussion of this. It's an important public issue.

As you know, especially with a career in personal finance, one of the things I'm most interested in is how young people and children can have financial security, and non-brutal careers, in today's America – and the America of the future, where advances in computers and robots may often decimate earning power and job security.

One of the things that most surprised me was the evidence you, and your linked-to articles, presented on how bad lab science PhDs had it. Medical research, natural research, applied chemistry, these are such noble and interesting pursuits. It's so sad that it's so common for these scientists to have such harsh, often brutally inhumane, careers. This stuff is so cool and so important; I used to really think my friends from childhood in the 70's who were into this would have such cool lives. And I was into it too, but as a kid in the 70's, B.I. (before internet, or even PCs!), you know so little about the world, and it's hard to really find out not the hard way. I actually thought I could go into business and economics first, get wealthy, and then switch to physical science, not realizing how demanding things were, and how early you have to start.

The big question is what went wrong. Why? I think there are two big factors, with the second probably being much bigger:

1) In academic research, provided you have the health, endurance, vigor, mental health, etc., you can usually create much more than 50% greater societal utility if you work 60 hours per week instead of 40. It's just not linear at all, given train of thought, intensity, not having to lose things from memory and get them back again all the time, being able to immerse for longer, rewards for doing things quickly, etc. In some cases you can create vastly more societal utils, far more than twice the amount, over a career working 80 hours instead of 40.

At some point you'll burn out and the marginal product of additional hours will decrease, and become negative. But given the advantages of strong health and energy, the successful people in academia tend to have this – athletes tend to do very well, and of course people who need little sleep – and they can work long hours fine.

2) Externalities and asymmetric and poor information are just so ginormous with regard to the basic sciences. Why are there so relatively few jobs to start with in the basic sciences? Why do finance people, and real estate developers, and the guy who started a granite countertop business (mammoth zero-sum-game positional externalities) make 100 or 10,000 times as much as someone making key contributions to curing cancer, quantum computers, or creating cheap solar? Monumental externalities of non-rival idea/information goods, and over generations, making it so hard to capture even a tiny fraction of the utils created.

And at the same time, so much of what can be captured very well in profits has negative externalities, like the pink elephant of economics, positional externalities.

Thus, left to its own devices, the pure free market worshipped by the Republicans will amazingly underpay for basic science relative to other things. The inefficiency and lost utility will be off the charts, especially over generations. And we see this.

And with such poor public information on economics, on externalities, so many people fall for pure free market soundbites when they vote. And this is understandable as people have so little time to learn economics.

The result is we spend way less on basic science than we have good smart people who would be willing to work in these areas, if they could get decent, non-brutal, jobs at comfortable middle class wages, or better to attract the top brains to the most important research. If the government dealt with the externalities commensurately, there would be far more money chasing the talent, and smart people would regularly have the bargaining power to not be brutalized, and to get good, or extraordinarily good, wages in the basic sciences.

Regarding the comment: "the pure free market worshipped by the Republicans will amazingly underpay for basic science relative to other things. The inefficiency and lost utility will be off the charts, especially over generations. And we see this...The result is we spend way less on basic science than we have good smart people who would be willing to work in these areas"

At the risk of instigating a political discussion, if it is true that basic science (and, by extension, career opportunities for scientists) is underpaid because of the free-market ideology and influence of the Republican Party, then I must ask - why hasn't the same occurred with regard to the *economics* field? It would seem to me that if the Republican Party was so intent upon reducing funding for basic science research, they should be just as intent upon reducing funding for basic economics research as well. Or, at least, economics research that doesn't conform to Republican-leaning economics.

After all, there are plenty of economists working in particular subfields - most notably within micro - that do not easily translate to political punditry, whether left or right-wing. And even within those subfields of economics that do lend themselves to the political subfields, one can find plenty of highly paid *left-wing* economists. If the Republican Party really has sufficient power to reduce the overall funding for the sciences, why wouldn't it then likewise use that power to reduce the funding for non-right-wing economics subfields? Heck, the Republican Party should have eliminated funding for every single left-wing economist a long time ago. {That's exactly what I would expect if the Republican Party truly had the power that you imply.} So why do such large battalions of well-paid left-wing economists continue to not only exist, but thrive?

Because science research requires tons of money while economic research requires almost none, so virtually no money would be saved, and in any case, what liberal economists would the GOP be able to cut funding for? Curious, are you still in high school?

However, the GOP (certain members, anyway) do want to stop collecting economic data:http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/01/a-new-gop-bill-would-prevent-the-government-from-collecting-economic-data/

There's good reason to call the modern-day GOP the Party of Ignorance.

Curious, are you still in high school? Economics research requires "almost no" money? Really? You think data is cheap? The Bureau of Economic Analysis, Bureau of Labor Statistics, Office of Management and Budget, the Federal Reserve, and the research divisions of the (partially-US-taxpayer funded) NGO's such as the IMF and World Bank together surely produce economics research and data analysis in the billions of dollars. Indeed, the existence of those organizations is one of the key reasons why - as per Noah Smith's post - the career prospects for economists are so strong. They could also stop funding the *economics*-specific research that is currently supported by the NSF, which currently supports plenty of it. Plenty of savings is therefore available.

But to do so would require a far more cunning and savvy GOP than we have currently seen. If they were really so capable, why couldn't they just leverage their savviness to simply win the 2008 or 2012 Presidential election in the first place, rather than wasting its energy to, as Richard Serlin has asserted, simply cut science funding, which doesn't really seem to meet their true goals (which I would assume would be to attain political power).

As far as which liberal economists the GOP might possibly cut funding for, the answer is elementary: cut all funding for, say, behavioral economists, as, let's face it, the political implications of most behavioral economists are mostly left-wing (for behavioral economics research almost always tends to indicate that people do not behave rationally and therefore cannot be trusted to make welfare-maximizing decisions). Reduce funding that investigates all market failures - including the 'New Keynesian' School and information economics - as the implications of that research are that free markets may choose suboptimal equilibrium points, such that government interventions may improve overall welfare. In short, reduce spending for the entire 'saltwater economics. ouevre. One could shift that funding to *increase* spending for proponents of, say, Real Business Cycle theory and the Efficient Market Hypothesis.

As far as whether the modern-day GOP is the Party of Ignorance, well, hey, the Democratic Party hasn't exactly showered itself with glory when it comes to the advancement of knowledge either. As a direct case in point, do prominent Democrats support a true evidence-based approach to investigate the effects of, say, gas fracking (which is almost certainly environmentally friendlier than the coal-mining activity that it replaces)? Or the Keystone pipeline (which, if not built, let's face it, would merely result in Canada exporting the oil to Asia, where it will still be consumed)? Or, perhaps most controversially of all, how about the true empirical effects of race-based affirmative action?

To be clear, I believe that both political parties suffer from their own idiosyncratic facets of ignorance. I simply find the notion that GOP-style free-market ideology would underfund specifically only science research to be unfounded. It would make far more sense for free-market ideology to underfund *all* research, economics research included. That does nothing to explain the disparity of career prospects between scientists and economists.

Besides, I'll offer another thought experiment. Dohsan, you assert that the difference between science and economics is that science research is costly (or at least, costlier) than is economics research. So let's explore that idea more closely. Plenty of science fields - notably the 'theoretical' fields - involve incur relatively low costs, indeed, arguably, lower than that of most economists. Research in string theory, loop quantum gravity, M-theory, requires little more than a desk, some pencils & paper, and copious quantities of coffee. Theoretical chemists who specialize in, say, computational chemistry and cheminformatics just require computing power, which becomes cheaper every day. And naturally we have the entire discipline of mathematics which, at most, requires some computing power, and usually doesn't require even that. {Granted, one might argue that math is not an actual science, but hey, it is funded by the NSF.}

One would therefore not expect that reductions to science funding to greatly impact the job prospects for the mathematicians and theoretical scientists. Yet last time I checked, their job prospects were nowhere near as promising as that of economists. Indeed, Noah Smith categorized those pursuits as "lifestyle PhD's": enjoyable, but unemployable. {The deep irony is that many of today's economists are basically rebranded mathematicians, publishing math theorems that could easily have appeared in math journals.} It's not at all clear how a free-market ideology that reduces science funding could explain the poor job prospects of the science *theorists*.

Hey Noah -- have you seen this paper on the importance of which grad school you go to for econ if you want to become a professor? The upshot is that the top "fifteen Ph.D. programs get 59% of their faculty from only the top six schools with 39% coming from only two schools, Harvard and MIT."

Zhengye Chen (2013) "The Path to Being an Economics Professor: What Difference Does the Graduate School Make?" http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2193581

This obviously doesn't invalidate your point about those graduating from a non-elite grad school still being well-off, but it's food for thought.

Interesting post. I am at the other end of this job discussion, as our group (an Analytics group within a Fortune 50 company) has hired a couple of Economics Ph.D's recently, and we're looking soon to hire 1 or 2 more. We hire Economists mainly for forecasting sales, etc, so time series analysis is important, but being able to do and learn other things is certainly essential (handling Big Data for example). The job market certainly seems tight from our end, as the number of applications we received for each position has been surprisingly low (maybe we're not posting in the right places?).

When it comes to the applicants, all too many fall into one of two disqualifying categories: (1) very mathematical, with not an ounce of common sense, or (2) very policy-oriented, with a weak math ability. It is absolutely essential for people in our positions to both create a good model and translate it into terms non-economists can understand, so people in both of these groups usually disqualify themselves. While many of the Economists we have interviewed fall into one of these 2 categories, the percentage is still lower for Economics than for other fields we hire from. The economists who do not fall into one of these two groups are very solid additions to our group.

I knew economists were out of touch with the reality of how people interact with the economy, but I didn't realize it extended to their own employment existing entirely within a controlled guild system of guaranteed employment. This is just amazing.

I knew that Mike could not express his thoughts clearly in writtent English (people do not interact with the economy) but I didn't realize it extended to writing a single sentence. This is just amazing.

I just read Landsburg's article, and it seemed very obvious to me that it was not sexist. He was pointing out that we can't judge actions just based on the direct harm, because otherwise having sex with an unconscious woman who never finds out what you did, would be perfectly fine.

"If I only steal people's kidneys who never wake up and find out what I did, it isn't unethical" is apologia for illegal violence. If you then said "if I only steal black people's kidneys who never wake up and find out what I did, it isn't unethical", of course I am a racist (as well as a terrible human being). The difference, of course, is that there isn't wide-spread stealing of black people's kidneys without consequence, while there is wide-spread rape of unconscious women (Stubenville being only the most egregious recent example.)

There is one other field that matches the beneficial characteristics of Economics very well: Industrial Engineering. IE may be a decidely unsexy field, creating a low supply of Ph.D students, but the job opportunties are huge. It is virtually impossible to find IE students--they get snatched up so quickly, especially the ones with an OR specialization. I'd bet it's even easier to get a job with an IE background than with Economics, and you have the same flexibility in the Ph.D program as is mentioned about in Economics.

One thing before entering an econ Ph.D. program is to look into Ag Econ programs. They are often equivalent to the Econ program at the same school, sometimes colisting courses, and there is much more grant money, and therefore research assistantships, available than in the straight econ programs. These days, many Ag Econ programs are positioning themselves as applied econ more than traditional production econ programs.

This is a really good suggestion for the poster below who is considering a second Ph.D. in econ after a Ph.D. in ecology. A very close friend did his Ph.D. in Ag Econ at UC Davis and now has a fantastic career as a fisheries economist, teaching in the Natural Resources School at Duke. My impression is that others in his cohort also had good outcomes, though I don't have more than anecdata on that. More importantly, he loves his work and gets to think about the natural world as well as about economics -- what he wanted in the first place.

For what it's worth, when I failed to pass my prelims[1] at a large flagship state institution, I was very much not awarded a complimentary Master's. I basically came out of those two years with nothing to show for it but some teaching experience that I leave off my resume because observant HR folks will ask questions.

[1] Turns out that they ask you general Macro questions regardless of whether or not they scheduled you to take any general Macro courses. Makes sense in retrospect, but came as an awful shock during the exam...

Based on the opinions expressed in this blog, does one really require six-figure debt and upwards of eight years of tertiary schooling to reach the false conclusion that government consumption is a source of sustainable economic growth?

But then, considering the glut of economic PhDs working in government and academia, and the dearth of them actually handling client portfolios, their role in the real world might best be summed up by something along the lines of: "Those who can, do. Those who can't, get PhDs in it."

It is a bit depressing to be asking this question, but how do you think econ departments would view someone applying who already has a PhD in another field. I could see it going either way. I just finished a PhD in ecology. I really like my field, enjoyed the process of getting the PhD, and have been fairly successful (10 peer-reviewer publications 6 first authored). Most of my work has involved modeling with a mix of dif eqs and agent-based simulation, so I think a lot of the skills would transfer.

With 4-6 years of postdocing and a bit of luck I could probably land a faculty position in my current field, but due to how few positions are available I would have little choice on where I end up. I nor my partner want to end up in some random midwesten college town (no offense meant, it's just not for me). Considering the timescales are probably equivalent for getting a permanent position in my own field and one in econ, maybe it is not so crazy to switch fields. Or is it...

BTW, before knocking small Midwestern (college) towns, have you actually lived in one?

Noah at least lived in Ann Arbor before deciding that it wasn't for him (though after growing up in S. IL & living and working in Chicago, NYC, & the Bay Area, I don't see a big difference in cultural attitude between the upper Midwest and East Coast--and _really_ don't see much difference between the Midwest and NoCal).

Thanks for the reply. I am passionate about what I do, but I think what I like about my field is probably general to most disciplines in science: tying to discern processes from patterns. At the end of they day if I get to spend my day thinking intensely and creatively I will be happy.

There are private sector jobs in my field, but they tend to be in areas where there is a bit of a conflict of interest between doing good science and company profit. Say you work for a consulting firm that is paid by a company to assess the environmental impact of a given product or activity, and that assessment is used as part of a formal regulatory risk assessment. Do you think the company would continue to hire your firm if you determine that the impact is too severe? I have no problem working in the private sector, but preferable when there is a clear benefit to the company when I do my job better.

You should walk over to the other side of the campus sometime, and ask, say, a junior philosophy professor or grad student how they like thinking away at their own pace. But be prepared to duck. 70 hours/week. Falling asleep at the computer instead of the lab bench. Etc. Your distinction between the first two categories hasn't been accurate for decades.

Finance PhD is much better than an econ PhD for any topic where they overlap. For instance, if you want to study "Experimental Finance, Behanvioral Finance, and Macroeconomics," you are much better off getting a Finance degree. The job market is much better and the salaries are much higher, and the PhD programs are much more supportive. Econ PhDs tend to take many students and weed them down, while Finance tends to take few students and nurture them.

Econ offers a broader range of topics to choose from, and that's the trade off. I wouldn't begrudge anyone getting an Econ PhD, but I don't think how great a Finance PhD is is widely appreciated. I certainly didn't know, when I entered an Econ PhD wanting to do macro-finance, and I'm much happier making the move to Finance.

I have mixed feelings about this article. The focus is completely on academic jobs, which isn't the sole reason that many people go for a PhD. I'm an engineering PhD student right now, and most - if not all - of my classmates are looking to go into industry, consulting, or entrepreneurship (all of which snap up eng. PhDs VERY quickly). Also, engineering PhD are free of charge (your adviser pays your tuition and health insurance), so...win-win.

Noah, I am asking just for curiosity. Why did you switch from physics to econ for a Phd? I mean you say that you loved studying physics, you liked what you were doing and you enjoyed it. So why econ suddenly for a Phd? I guess it would be possible to do physics for you (stanford physics, btw, which is pretty cool) and keep writing econ, reading econ, blogging, etc. so why econ phd, not physics? I hold a phd in econ and sometimes I am asking to myself why not physics. It would be fun, too.

"Lifestyle PhDs. These include math, literature and the humanities, theoretical physics, history, many social sciences, and the arts."

Some of these are not like the others. There may not be many job openings for pure mathematicians or theoretical physicists per se, but they are very, very employable in computing or any field requiring mathematical or statistical know-how (eg. finance).

Also, the distinction between pure and applied mathematics is not exactly well-defined. :-)

> Second, be aware that the culture of economics is still fairly conservative, and not in the good way. Econ is one of the few places in our society where overtly racist and sexist ideas are not totally taboo (Steve Landsburg is an extreme example, but that gives you the general flavor).

I clicked on, and read, the Steve Landsburg blog and I didn't see any sexism in it.

Landsburg article was saying that if judge an action based purely on the direct harm that it causes, then having sex with an unconscious woman, who isn't harmed at all, would be moral.

It's a thought experiment to make you think about rights, right and wrong, etc. It's extremely poor reading skills to think that he was making a sexist comment!

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Second, be aware that the culture of economics is still fairly conservative, and not in the good way. Econ is one of the few places in our society where overtly racist and sexist ideas are not totally taboo

Yet another article by an economist talking about how great it is to be an economist.... That's all well and good, but prospective students should be under no illusions: the barriers to entry are extremely high, as you need to be prepared to get a Ph.D. in what is actually just a flavor of applied mathematics. If you don't love proofs and aren't amazing at them, then you will never get through the Ph.D., let alone the first year or two. As Noah Smith is implicitly arguing, Life's Easy When You're Born a Math Genius. No, you don't have to be Terence Tao or Richard Feynman, but yes, you do probably need to be in the top 0.05% of the population in mathematical ability (more so lately)--so, in most cases, even asking, "Should I get a Ph.D. in economics?" is a fanciful absurdity. Just crack open some grad-level textbooks and you will see what I'm talking about.

I graduated school in May 2011 with a double major in Math and Econ. I also wrote an economics thesis paper as an undergrad. I have worked as an analyst and a research assistant for corporations over the past two years and working with phd's at these firms has made me realize how much I miss conducting my own research. I am thinking about applying to grad schools this fall, so if I get in I would start in fall of 2014. My question is, is it too late to pursue a phd now? Would working for three years hurt my chances of getting into a good program? The jobs I have worked have given me great statistical and research skills and these are skills that would def come in handy for a phd.

1) Apparently the dire reports re: life sciences Ph.D.s are pretty accurate. Of course, a lot of people with life sciences Ph.D.s go into industry, but they commonly still do one or more post-docs first (meaning quasi-poverty into your early-late 30s). In my limited experience (two years as a research biologist at a now-very-successful biotech firm in the early '90s), these jobs are much less intellectually stimulating, and involve a much more "corporate" culture, than academic work does. Finally, the percent chance that a life science Ph.D. graduate will ever find a tenure-track academic position seems to be very low, although it is hard to tell because this particular measure (% of Ph.D.s *ever* obtaining a T/T position), while it may be the most meaningful for people trying to make decisions about a life-long path, is neither well-studied nor well-disseminated. E.g., % of life-science Ph.D.s with a T/T position immediately after completing the Ph.D. is meaningless, since a post-doc is simply required to obtain a T/T position.

2) The humanities are not nearly as bad, across the board, as popular reports would have it. In fact, humanities Ph.D.s have by far the highest chances of obtaining a T/T position immediately upon degree completion, and it's well above 50% -- much higher than any social science, a category that includes economics.

Further, if you're a besotted humanist, but early enough in your career (say, college freshman or earlier) and/or willing to accumulate one or more MA degrees in the course of learning the skills to do research in technical humanities fields, your chances of finding not just a T/T job, but a good one -- well-paid, with a reasonable teaching load, and in a location a sane person would want to spend their working life in -- are much, MUCH higher than the aggregate would suggest.

What's the secret? Learn ancient Greek and Latin, plus four modern foreign languages and either/both Hebrew and Arabic (classical and modern); go into Religious Studies, late antiquity (a tiny but not-shrinking field), or medieval history, where Arabic-Christian-Jewish interaction is cutting-edge. Even better, learn classical and modern Japanese and Chinese; go into any field of literature, history, or -- especially good -- religious studies in East Asia. Finally, master not only Arabic but the very difficult fields of Quran, Islamic origins, and/or Islamic law. In ascending order, these fields promise pretty good to practically guaranteed chances of an academic "dream job".

History Prof Living a Pretty Lifestyle in [Name of Highly-Desirable US City Redacted]

Humanities PhD's typically take two years longer to complete than economics PhD's. The pay in an equivalent tenure track position is considerably lower. There is often no fall-back if you don't make it in academia. If you go to the adjunct project at the Chronicle of Higher Education, it is littered with stories of humanities PhD's working as adjuncts for $2000 a course or even less.

A pure math PhD will get you a job, guaranteed, *if* you pick the right field within math. I.e. a useful one which *has* applications.

You don't need to *do* applications, you just need to be able to teach a subject which is needed for applications. There are always jobs teaching math to undergrads. There will not be similar jobs teaching econ, because econ is mostly bullshit. ;-)

Of course, I speak as someone who took a different route: learn enough, inherit enough, and get lucky enough, to make a fortune off the stock market, and forget about these silly job things which you 99%ers think about. ;-)

Hmmz, well I just sealed my PhD position, actually just 3 days ago (btw: thanks www.phdposition.com !), however... it's a biochemistry position... and after just reading this blogpost I must say: I am not that worried about my future career perspectives, frankly speaking...

These fields pay better than other PhDs. Of the traditional intellectual disciplines, economics is the best paid.

What do these subjects have in common? A credible level of nonacademic demand. This is also characteristic of engineering, whose PhDs can work in corporate labs and become corporate execs.

You omitted to mention that postdocs are almost nonexistent in economics and business subjects. At age 26, one goes straight to the tenure track.

I did PhD studies partly in 2 Econ depts., partly in a business school. Yes, the interpersonal culture is conservative. The econ grad student's idea of fun is rather cautious. Econ and business PhDs all marry in their 20s and have 2 kids and a low divorce rate. Econ and business academics are more likely to vote GOP than any other academics. Econ PhDs are rather cool to affirmative action in hiring. Most idealistic young people would deem it abhorent to study in an economics dept.

A reason you omitted:ECONOMICS IS A BIG TENT WITH MANY SUBDISCIPLINES. The emphasis on purely technical modeling is declining. There is a growing appreciation for the intricacies of the real world. Economics is more data based than was the case 40-60 years ago.

Economics helps you save for retirement, minimise your taxes, do a bit of consulting on the side, serve on the board of a nonprofit. In my social life, I often find myself advising friends.

" Reason 1: YOU GET A JOB."ME. The residual employer of many econ PhDs is the public sector.Teaching in a mediocre business school is not rewarding.A "failed" PhD in economics is one who works for state or local govt. The pay is middle class, and the civil service rules give you fair job security.

"Reason 2: You get autonomy."In economics, on the other hand, you can start doing your own original, independent research the minute you show up (or even before!). Profs generally encourage you to start your own projects. Unlike in lab science PhD programs (but like in "lifestyle" PhD programs), your time is mostly your own to manage."ME. I largely agree.

"Reason 3: You get intellectual fulfillment."ME. Yes, if thinking very rationally about human behaviour and social institutions does not bother you. I have noticed that it does bother many people.

"And economists, even if their research is highly specialized, are encouraged to think about all different kinds of topics in the field, and encouraged to think freely and originally."ME. Agreed, but most everyday economists do not succeed at this.

"In econ, furthermore, you get exposed to a bunch of different disciplines; you get to learn some statistics, a little math, some sociology, a bit of psychology, and maybe even some history."ME. Leave out the other social sciences, and include business functional areas.

"...econ is a field in which outsiders and mavericks are able to challenge the status quo."ME. I am not as optimistic about that as you are.

"The simple fact is that econ, you don't need money to advance new ideas, as you do in biology or chemistry."ME. Very true.

"And you don't need math wizardry either, as you would if you wanted to introduce new ideas in physics."ME. In econ, you must be comfortable with freshman year uni math, and with undergrad probability and statistics.

It seems there are two schools of thought on the math needed for an Econ Ph.D. program: (1) Basic calculus and statistics, or (2) theoretical courses on par with a math major (e.g. Real Analysis, Metric Spaces, Topology, etc.). Can this be attributed to area of specialization, or the rigor of the program? For example, the prerequisites to understand, say, labor economics would likely be very different from game theory or econometrics.

Any other engineers considering changing fields? Our math background falls between these two cases; more than basic calculus, but little if any exposure to the theory.

The problem is that there isn't any value-add in a modern econ PhD program. Someone with dual history & math PhDs is more or less what you want for most econ jobs -- what you get from an econ PhD is someone who's been brainwashed with nonsense, instead.

Econ PhDs are slowly being devalued in the outside job market. Math PhDs are *never* devalued in the outside job market, although you are expected to prove that you can do something practical too (a CS Masters, Eng Masters or whatever), because the risk in hiring a math PhD is that you've got an ivory-tower type.

Linking to a slightly more sober take: http://marginalrevolution.com/marginalrevolution/2013/02/how-much-does-graduate-school-matter-for-being-an-economics-professor.html

Of the 138 Ph.D. economics programs in the United States, the top fifteen Ph.D. programs in economics produce a substantial share of successful economics research scholars. These fifteen Ph.D. programs in turn get 59% of their faculty from only the top six schools with 39% coming from only two schools, Harvard and MIT. Those two schools are also the PhD origins for half of John Bates Clark Medal recipients.

I guess your point is that the outside market for econ PhD's is good. Which I find strange because in the quant-finance area econ PhD's are not valued.

Hi, I'm relatively old for this sort of thing (54) but something for the last few years has been drawing me towards getting a Ph.D in Economics. Not sure why. I certainly would like to understand how the economy/economies work. I have what I consider a good job, which is very fulfilling. Why do I want to get a Ph.D. in economics? Why should I at this age? I could just read about economics I suppose, and formulate, and perhaps act on, my own conclusions and opinions.. but why is this desire still there, quietly nudging me it seems? Is it just for an ego-boost? A better bump in pay right before I retire? My older brother is currently working on a physics Ph.D. (he's already a working scientist, making a good living). Is it brotherly competition which is driving me perhaps? Someone please talk me out of (or into) this!...

If you think you can succeed in an Econ grad program without mathematics, think again. The math requirement is no joke. I should complete my Masters in Econ this Fall, ceteris paribus. However, the thought of laboring for another 5 years as a grad student has got me thinking.

I am a third-year PhD student in neuroscience at an Ivy League institution with an undergraduate degree in theoretical physics. Due to dismal job prospects and unfulfilling lab work, I am contemplating a change. In your oppinion, do you think I would have a realistic chance to get accepted in a decent economics or finance PhD program? Also, do you think it would make sense to change fields at this stage? Thanks!

In your opinion, do you think I would have a realistic chance to get accepted in a decent economics or finance PhD program?

You will need to have taken statistics.You will also need letters of recommendation showing you are a diligent researcher.You will need to demonstrate a true interest in the econ field.In that case, I think yes, most definitely.

Also, do you think it would make sense to change fields at this stage?

That's something only you can answer for yourself! But remember that the Sunk Cost Fallacy is a fallacy!

Much, though not all, of the difference between economics and other fields is selection, not the effect of the PhD itself. It is harder to get into an economics PhD than a humanities PhD. It is also harder to get through, as there are plenty of people who fail prelims. A different selection issue operates for maths, theoretical physics, and maybe some others. Many of the people going through these programmes are very smart, but not brilliant enough to make it as academics. They have all of the skills needed to land one of the econ fall-back jobs you mention (accounting, finance, consulting, etc.). However, these disciplines are much more likely than economics to attract weirdos without the social skills needed to function in these environments.

Which one is better in terms of industry placement, prestige, and future gains, an Econ or a Statistics PhD? If you fulfill the requirements to enter an econ PhD (real analysis, linear algebra, etc) would it be that hard to opt for a stat PhD instead?

Noah, when you applied to graduate school, how did you demonstrate interest in economics if you had a physics background? Did you do research in economics? I'm currently a math undergrad and I'm thinking about doing an econ PhD but have no coursework in econ as of yet.

I agree with you on getting a job, even if you graduate from a low ranking school. I got my PhD in Econmics from a mid to low ranking school in the UK. I did my PhD there because I had a great relationship with my supervisor for 3 years. Soon after my PhD graduation he moved to a top 5 UK Economics department.I secured a job in buyside finance before I'd even finished in London. I've never looked back since. I've now been employed by someone who has PhD in Econ from Oxbridge and went to Lse as an undergrad, it has never been an issue that I didn't go to a top 5 Econ school in the UK. Oh and yes 10 years after PhD graduation, I make in the region of 150K to 200k GBP total comp. So you are correct, you do get paid well.Why did I go and do a PhD in Econ? Because I always loved Economics, was good at it and had no clue what to do with my life at 25 years old

"An econ PhD at even a middle-ranked school leads, with near-absolute certainty, to a well-paying job in an economics-related field. I believe the University of Michigan, for example, has gone many, many years without having a PhD student graduate without a job in hand."

This implies that you consider the University of Michigan to be a "middle-ranked" program. Being that Michigan is ranked in the top 10-20 in most rankings, I suppose I do not know how to interpret the rest of your blog post, because you and I must understand certain words in the English language to mean very different things.

Noah I have a question if u or other buddies answer. I am a bachelors in Plastic engineering, MBA in general business administration. Took 2 courses of econ ( intro to micro 201 and business economics).. If i apply for econ PHD in international economics, will they accept me cause i don't have econ bachelors or masters but i know math and i loved the two econ classes i took. I hate my plastics engineering job with the depth of my heart. Replay please cause it's the question of my future. Very very tense and confused today of what will i do in future... so came to your site in hope of some encouragement.

Actually if you get a math PhD with a Masters in CS you can do better than the Econ PhDs in the job market. You can be hired by INDUSTRY. Even if you aren't, there's an infinite number of teaching jobs.

It's actually work to get a math PhD, though, and requires being actually smart. You have to invent a new theorem. It can take people a *decade* after completing the coursework. Most people who get math PhDs never want to do math research again.

By contrast, you can get an Econ PhD without doing any hard work, and you can even get one by spouting falsehoods (which is not acceptable in mathematics).